The Best Annuity Death Benefits

Shawn Plummer

CEO, The Annuity Expert

When it comes to protecting your loved ones, you have a few options. One option is life insurance, which pays out a lump sum of money to your beneficiaries in the event of your death. An alternative to life insurance is annuities with enhanced death benefits. Unlike life insurance, annuities with enhanced death benefits do not require a medical exam, and applicants cannot be denied coverage due to pre-existing medical conditions. Because there are no exam requirements, annuities make an excellent choice for those who may not be able to qualify for life insurance. This guide will discuss the pros and cons of annuities with enhanced death benefits compared to life insurance.

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What Are Annuity Enhanced Death Benefits?

An annuity with enhanced death benefits is a type of annuity that offers additional benefits to your beneficiaries in the event of your death. These benefits can include a higher payout, a more extended payout period, or both.

How Do Enhanced Death Benefits Work?

Like income riders, enhanced death benefits for annuities are life insurance riders designed to maximize an inheritance without any medical underwriting, a life insurance alternative. These annuities can be attractive for people who expect to live only a short time due to poor health.

Typically this benefit comes with an additional cost, but sometimes it’s built into the contract.

Standard annuity death benefits apply in these contracts, and you can consider this an “upsell” to your current contract’s death benefit.

Warning* Be cautious of any waiting period. For example, in exchange for an enhanced benefit with no medical underwriting, the contract owner will have to endure a “waiting period” to be eligible for such benefit.

Also, be aware of how the enhanced benefit is distributed after you pass away. Sometimes the benefit is paid out to your beneficiary in a lump sum, and sometimes the benefit is paid out over a period of time.

Advantages And Disadvantages Of Enhanced Death Benefits

One of the main advantages of annuities with enhanced death benefits is that they accept 401k and IRA money. This acceptance means you can use your retirement savings to purchase an annuity with enhanced death benefits. Another advantage is that there are no medical exam requirements. The lesser health requirements make them an excellent choice for those who may not be able to qualify for life insurance.

One downside of annuities with enhanced death benefits is that they can be more expensive than life insurance. In addition, payouts are not always guaranteed and may be based on the annuity’s performance. Death benefits from annuities are taxable income, whereas life insurance proceeds are tax-free.

Finding The Annuity With The Best Death Benefit

Look no further if you’re shopping for the best annuity death benefits for estate planning purposes. Below are the best contracts with riders designed to enhance an inheritance for heirs. I’ll update this list regularly.

These annuities are ideal for:

What Should I Do If I Can’t Get Life Insurance?

If you have been declined life insurance coverage due to a pre-existing medical condition, don’t fret. You can:

There is no medical underwriting for annuities. Therefore, you can use it for the next best thing.

Why Buy an Annuity with Enhanced Death Benefits?

Below are a few reasons why people purchase annuities with enhanced death benefits:

AnnuityTypeRatingRider Fee
Americo LibertyMarkIndexedA0.30%
Athene AccumulatorIndexedA0.95%
Pacific Life Index DimensionsIndexedA+0.40%
Fidelity & Guaranty Prosperity EliteIndexedA-1.5%
Great American Legend IIIIndexedA0.95%
Americo ClassicMarkIndexedA0.30%
Great American Safe ReturnIndexedA0.95%
Nationwide New HeightsIndexedA0.50%
Athene AgilityIndexedANone
Great American Custom 10IndexedA0.90%
Great American Legend 7IndexedA0.95%
Pacific Indexed FoundationIndexedA+0.40%
Allianz 222IndexedANone
Americo FutureMark (Legacy)IndexedANone
Global Atlantic Choice Accumulation IIIndexedA0.50%
Nassau Personal Protection ChoiceIndexedB+1.15%
Athene BCA 2.0IndexedA0.85%
Columbus Life AccountMaxFixedA+0.35%

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Need Help Getting Life Insurance Coverage?

If you have a pre-existing medical condition and want to buy life insurance, you will need help from an expert. This person can help ensure that you get coverage so that you don’t get declined.

Warning: Applying for life insurance without a medical exam can be risky. If you get declined coverage, it could be at least two years before you can get any life insurance.

Impaired Risk Life Insurance
Have You Been Declined Life Insurance Coverage Before?

Frequently Asked Questions

What are alternatives to life insurance?

Annuities with enhanced death benefits are an excellent alternative to life insurance. There are no medical exam requirements, so almost anyone can get them. They also accept 401k and IRA money, which life insurance does not.

Shawn Plummer

CEO, The Annuity Expert

I’m a licensed financial professional focusing on annuities and insurance for more than a decade. My former role was training financial advisors, including for a Fortune Global 500 insurance company. I’ve been featured in Time Magazine, Yahoo! Finance, MSN, SmartAsset, Entrepreneur, Bloomberg, The Simple Dollar, U.S. News and World Report, and Women’s Health Magazine.

The Annuity Expert is an online insurance agency servicing consumers across the United States. My goal is to help you take the guesswork out of retirement planning or find the best insurance coverage at the cheapest rates for you. 

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